Experts: Politics ruins Iran economy

Eleven prominent Iranian economists have issued a dire warning to the Islamic republic's leadership, complaining that political squabbling has left fundamental weaknesses in the economy ignored.

08 Nov 2004 21:53 GMT

Iran's economy is dependent on oil revenues

In an open letter carried in several national newspapers on Monday, the group of top university academics lashed out at what they said was a "society infected by politics" and policies dictated by "emotions and idealism regardless of their economic consequences".

The professors also sounded a caution over continued "isolation in the international arena and blanket state administration in the manufacturing, industrial and service sectors".

Iran was also over-dependent on oil revenues and suffering budget shortfalls, financial and administrative corruption, stubbornly high unemployment, lofty state subsidies, technological underdevelopment, smuggling and making uncompetitive products, they said.

Signatories

"For a country like ours, whose administration has been always in the hands of a certain domain of limited figures, there can be no room for the justification of absurd trials and errors" or "spontaneous initiatives without scientific basis", the letter

said.

Political feuds have left economic woes ignored, say experts

The 11 signatories of the letter, timed to figure in the debate before the presidential election scheduled for May 2005, are from several top universities across the country. A number of them have served in state economic organisations.

The warning is a direct challenge to Iran's conservative-held parliament, elected in February after most pro-reform candidates were barred from contesting the polls.

Conservatives pledged to focus their attention on bread-and-butter issues, accusing reformists loyal to President Muhammad Khatami of having spent too much time on social and cultural reforms.

But the parliament, or Majlis, has yet to focus much of its attention on issues such as the burden of energy subsidies, high inflation - 15% officially, around 30% unofficially - or downsizing or privatising state bodies.

Deputies have also openly opposed several major contracts signed with foreign firms, giving parliament a veto right over multi-million dollar deals inked with Turkish companies and covering the airport and telecommunications sectors.

Reformists have accused hardliners in parliament of being hostile to what they see as badly needed foreign investment.